The gold market has been attracted to the $5,000 level for some time, and as we had a holiday on Monday, nothing seems to have changed.
Gold
The gold market has been very noisy to say the least over the last week or so, but really the market isn't very clear on where it wants to go, at least at the moment. One thing that I do think is going to continue to cause a bit of an issue is the $5,000 being a potential magnet for price and that's essentially what we've seen for a couple of weeks now.
I don't have any interest in shorting this market. I think it's probably going to eventually break to the upside. Short-term dips should end up being a potential buying opportunity with the possibility of finding value. I think the $4,800 level and the 50-day EMA just below there both offer plenty of support.
Finding Value in the Trend
It'll be interesting to see how that plays out, but I also recognize that we could go all the way down to the $4,600 level and still be in a very strong uptrend. It's really not until we break down below $4,400 that I'm concerned.
That being said, this is a market that suffered a lot of trauma a couple of weeks ago and I think you can see this as a situation where you're trying to find value. I do think ultimately gold tests the highs again. I think we go to look to at least $5,400, but that doesn't mean it has to be right away.
In fact, I suspect that we have a lot of sideways action ahead of us and quite frankly that's good because you cannot have this impulsive move nonstop. It would literally break the financial system. So, with that being said, I think the adults are back in the room. There is an argument to be made for gold to go higher over the longer term, but in the meantime, we've got to get a little less interested if that makes any sense. You don't want it to be a hot market.
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